A very different kind of dish networkOctober 17, 2011: 5:00 AM ET
Thanks to a new satellite blasting into space this week, broadband access in rural America and southern Canada is about to get a lot better.
FORTUNE -- Slow and expensive options for connecting to the Internet may seem like an inevitable downside to country living, but rural Americans are in for a pleasant surprise. Cheap bits, delivered by satellite, are about to flood rural North America.
A new satellite, now sitting atop a rocket in Kazakhstan and set for launch this Wednesday, will allow over one million Americans and Canadians to get downloads at a whopping 12 megabits per second, according to WildBlue, which will sell the service starting early next year. That's roughly 10 times the speed of today's typical satellite service and twice as fast as the average American connection.
Current satellites from companies like HughesNet and WildBlue now provide people off the grid with relatively slow and expensive connections. HughesNet's current high-end plan costs $109 per month with a maximum download speed of 2 megabits a second and a cap that limits downloads to half an hour per day at top speeds. (So forget using Netflix (NFLX) on demand.) The entry level plan offers downloads at just 1 megabit per second.
Slow downloads and tight usage caps have given the first generation of satellite-delivered Internet access a bad reputation. "Our service has been optimal for customers who have no other choice. It's been seen as a 'last resort' technology," admits Stephanie Copeland, chief operating officer at WildBlue.
But while consumers may have come to assume that satellite Internet service is inherently slow and overpriced, that's not so, says Mark Dankberg, the chief executive of Viasat (VSAT), which built the new satellite. Satellites have long been able to provide fast downloads, but total capacity was so limited and expensive that standard consumer offerings had to be much slower than cable and DSL. "What has made Internet service by satellite bad is economics, it's not physics," says Dankberg.
To radically change those economics, the new satellite capitalizes on the vast improvements in digital wireless technology since the launch of first generation of satellites. (Dankberg likes to measure this progress as increases in "gigabits per megabuck," meaning how many billion bits of capacity he can offer per million dollars spent on a satellite.)
The news is slightly less good for Americans in much of the Western U.S. The old WildBlue satellite still works, and will focus all its capacity on the blue areas of the map above. That will allow the company to offer subscribers in those regions faster service too, though it's likely to top out in the 4 or 5 megabits per second range.
While Dankberg is certainly right about satellite service as measured in the critical "megabits per second," the technology will always have some downsides relative to traditional urban connections over cable modems or fiber. Most significantly, even at the speed of light it takes time for a signal to reach a satellite orbiting 22,000 miles above the earth.
WildBlue says they expect the added delay (also known as latency) to be 1 second longer than a fiber optic connection. When downloading a TV show, web page or email that extra second will scarcely be noticable. But it will make playing some online games impossible and add an annoying lag to Skype phone calls.
There's more possbile good news for bandwidth hungry rural Americans. In some regions Wildblue's new service will compete with "Super Wi-Fi," a ground-based wireless technology that also happens to be well-suited to connecting rural America.